This is CBS I On The World with John Bachelor. Here's John Bachelor.

This is CBS I On The World. I'm John Bachelor. It is a great pleasure to welcome Nicholas

Wapshot, the author of Samuelson Friedman, the battle over the free market. A new book

that takes us back to the 20th century and then forward to the 21st century to settle

a debate that cannot be settled between two schools of economic thinking. One represented

famously by John Menard Keynes, the other represented famously by Friedrich Hayek, the

Hexians, the Keynesians, but their disciples, Samuelson and Friedman. So we begin with an

event. It is June of 1980. Inflation has peaked. Runaway inflation has peaked, but they do

not know. Paul Voker is in the audience. He is now the man who's making decisions at

the Fed and the speaker is Milton Friedman of the Chicago School. Nicholas, congratulations

and a very good evening to you and your book is a treat. If I'd read it as a younger man,

I would have been less perplexed by the events of these last decades. When I realized that

these men, these significant economic theoreticians were intimate friends and correspondents and

cared a great deal about each other and their families. But this day in June 1980, Milton

Friedman launches an ad-hamanum attack on the decisions made by Paul Voker. You describe

him with his tall frame in the audience, sticking above all the other seated guests. And the

ad-hamanum attack is blunt. What is the case that Milton Friedman makes and how is it that

Paul Voker is able to respond? Oh, Milton, good evening to you, Nicholas.

Good evening, John. It's great pleasure to talk to you again. This is an absolutely key moment

in the battle between the Hayekians and the Keynesians, but 50 years later after the event.

And they are making decisions about exactly how to purge hyperinflation from the system.

By the 70s, everybody was in despair. The Keynesians couldn't understand why runaway inflation

...